The David Lin Report Will 2025 Repeat the Great Depression? 'Perfect Storm' For Economic Fallout | Phil Magness
May 12, 2025
Phil Magness, Senior Research Fellow at the Independent Institute, dives into the potential economic fallout from Trump's tariff policies. He highlights alarming historical parallels that could lead to another Great Depression. Magness discusses the constitutional debates surrounding tariffs, the risks of a multipolar world, and how current economic conditions threaten American households. Additionally, he examines the Federal Reserve's struggles with inflation and market reactions to trade policies, warning of the lasting impact on the U.S.'s global standing.
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Tariffs Echo Great Depression Errors
- Trump's tariffs mirror Smoot-Hawley levels, risking a trade war and economic damage like the 1930s Great Depression era.
- Additional factors like monetary and fiscal mismanagement would determine if a recession truly unfolds.
Questioning Tariff Legal Authority
- Legal challenges question Trump's use of the International Emergency Economic Powers Act to impose tariffs.
- Courts may strike down tariffs imposed without congressional oversight, forcing use of conventional, reviewed measures.
Tariffs Did Not Boost Growth
- Protectionist tariffs in late 19th century America did not accelerate growth in protected industries like steel.
- Non-tariff sectors such as transportation and electrification grew faster and drove U.S. industrial expansion.